The Las Vegas Valley is once again a hotspot for the nation’s housing market. Local home price have risen over 20% in the past year throughout the Valley in part because Wall Street institutions have poured billions of dollars into our area’s distressed inventory. They are buying them up and turning them into rentals.
The rapid price gains have some worried about a new housing bubble. According to a recent article in Forbes Magazine, bubble talk may be premature. Fitch Ratings, a New York-based ratings agency says homes in the Las Vegas Valley are still underpriced and in fact Las Vegas ranks among the 5 most undervalued housing markets in the nation.
Local prices fell so far below their historic levels that the price increases are appropriate and sustainable is what the Fitch agency believes. They compiled a list for Forbes of the most overvalued and undervalued housing markets in the country based on its quarterly Sustainable Home Price model, which weighs home price trends against the economic fundamentals of the local market, including income growth, unemployment rates, population growth, mortgage rates, rental prices, buyer demand and inventory levels. If home prices grow faster than the rest of the local economy, then housing is becoming overvalued; if homes are trading for prices lower than the local economy can sustain, then housing is undervalued.
For more information or to read the entire Forbes article click here; http://www.forbes.com/sites/morganbrennan/2013/06/13/the-most-overvalued-and-undervalued-housing-markets-in-the-u-s/